Estimated reading time: 5 minutes
Thinking about starting your own practice? Experts highlight five key considerations you shouldn’t overlook. By John Burfitt
For any vet dreaming of opening their own practice, first the bad news. Data from the Australian Bureau of Statistics (ABS) reveals that almost 60 per cent of solo operators exit the market within three years and almost 40 per cent of employing businesses close in the same period.
But the good news is that according to some veterinary profession consultants, new vet practices tend to perform better than other small businesses.
“Few startup veterinary clinics fail and none we have worked with have failed—some take longer to become profitable, but do so within three years,” Dr Anne Lencioni of veterinary business consultancy APL Accountants says.
Ben Marcos, general manager of consultancy BusiVet, agrees. “We haven’t seen too many fail, but there are the ones that probably haven’t yet hit their full potential,” he says.
Dr Lencioni believes most veterinary practice startups succeed because most vets are well-organised, cautious planners and often well financed. But, she adds, that’s no excuse for complacency. “Some small businesses starting up haven’t thought through the business side.”
Other experts echo this view, offering five key considerations for vets preparing to open their first practice.
Take your new role seriously
One of the most common mistakes is assuming clinical excellence will deliver commercial success for a new practice owner. “Many vets I’ve worked with see their clinical skills as their sole focus, but once you own your own practice, you’re now a business owner as well,” Chris Green, business strategist and author of Business By Design, says. “It’s a whole different skill set and being a business owner is a very different identity that needs to be fully adopted, along with being a good vet.”
Business leadership coach Brad Giles of Evolution Partners and author of Bigger Isn’t Better, Better is Better says a new business owner must fully embrace both roles.
“I’ve seen too many people not take the business owner role seriously,” he says. “They fall into thinking, ‘I’m a vet, but surely anyone can do a bit of business on the side’. That business side needs to be taken just as seriously as what happens in the consulting room.”
Do your homework
Rushing into setting up a new practice without doing your homework can be one of the fastest ways to derail a new business. “Create the right team around you—reach out to advisers, consultants and mentors—as these are the people who can advise you on what to do and what mistakes others have made to learn from,” Ben Marcos says.
Few startup veterinary clinics fail and none we have worked with have failed—some take longer to become profitable, but do so within three years.
Dr Anne Lencioni, APL Accountants
“And have a clear business, marketing and promotion plan that sets a framework to follow.”
That homework might include analysing competitors and understanding local demand, so investing time in gathering information can prove to be one of the best investments, Chris Green adds. “Owning your own business requires significant understanding, training and knowledge because you are putting so much on the line,” he says. “It’s those who aren’t actively working on the business and planning for the future that could struggle.”
Manage cashflow
Having the cash reserves to keep the business going through the ups and downs of the early months is key, Dr Lencioni advises. “Small businesses starting up often run out of cash,” she says. “It can take time to build up revenue and profit, so cashflow is important.”
She says that setting the right fee scale is paramount for a new practice.
“Adequate pricing is essential to get your cashflow happening, so be careful when considering discounting or undercharging in the quest to get clients in the door.”
Giles adds that conservative financial forecasting is just as important. “Make sure that you’ve got a good cashflow forecast that will see you through a year or two,” he says. “Have enough cash in the kitty to keep the business running when you go through the peaks and troughs can make the world of difference to staying afloat—and to your stress levels!”
Choose a good team
Whether the new practice has a small team, or a big staff, Chris Green says one recruitment motto needs to be adopted. “Consider the right person for the right job, not just someone who’s an old friend or you’ve worked with in the past. You want to present a skilled workforce at the right level, so they can do the right billable work that will maximise profits and secure financial stability.”
Green also advises not to attempt to be all things to all people. “You need to focus on what you do well as that’s what will bring in clients. So have the right people around you—maybe a strong practice manager, another vet or a social media whiz—who can do those other things well to support your approach.”
Embed strong systems
A new business needs a strong framework to operate within so it can hit the ground running with a range of systems and processes in place, Brad Giles says. “The more systemised and process-driven you can make your business with all the rules in place, the better framework it has to stay on track as you embark on the new enterprise.”
Dr Lencioni notes that efficient systems must extend into performance tracking. “Track important metrics like client spend, average transaction fee and client numbers, and then analyse them so you can address any problems early,” she says.
But strong systems should not remove flexibility as a strong structure should allow a practice to scale as it takes off, Ben Marcos adds. “A vet will only do this a few times in their career, so it needs to follow a plan. If not and they get it wrong, it can be very expensive.”
